Recent concerns raised by the former Senior Judge in the Court of Protection over the use of Lasting Powers of Attorney (LPAs) have highlighted the financial abuse perpetrated by some attorneys.
An LPA is a powerful legal document that allows a person to appoint trusted individuals to make important decisions about finances and / or care on their behalf, with such an appointment either being triggered by, or continuing in the event of, a loss of mental capacity through an accident or an illness such as dementia.
In the foreword to his new book, retired Senior Judge Denzil Lush raised concerns about the “lack of transparency” in how appointed attorneys manage older people’s finances. The former judge went on to criticise the Ministry of Justice as being “disingenuous” in its promotion of the legal document.
Lee McClellan, a partner with Palmers who specialises in older client legal matters, says that there is a clear tension between, at one extreme, the concerns expressed by former Judge Lush and, at the other extreme, the apparent desire on the part of both the Ministry of Justice and the Financial Conduct Authority to remove or water-down many of the ‘safeguarding’ requirements for the creation of LPAs.
“Whilst many lawyers share Denzil Lush’s concerns regarding the Government’s apparent disregard of the rising levels of financial abuse of the elderly in the way in which they promote and facilitate the creation of LPAs, his comment that he would not sign an LPA himself risks dissuading people from putting sensible arrangements in place for the handling of their finances should they become incapable of dealing with them in the future” said Lee.
“LPAs are neither inherently good nor bad. They can be of great assistance if used correctly and very dangerous if not. They are not suitable for everyone regardless of their circumstances and there will be some situations where the alternative of an appointment of a Deputy by the Court of Protection – advocated by Denzil Lush – might be preferable.
“Putting former Senior Judge Lush’s comments into context, during his 20-year career at the Court of Protection, he will undoubtedly have seen the very worst cases of financial abuse, which thankfully are the exception rather than the norm.
“An LPA can be a positive and effective legal tool, which ensures your wishes are respected should you ever lose capacity but there is a clear need for professional advice when considering creating powerful legal documents of this nature.”
Association of Lifetime Lawyers, (SFE) an independent, national organisation of over 1,500 lawyers provides specialist legal advice for older and vulnerable people.
The group has been campaigning to ensure essential checks and controls are conducted when making an LPA.
Here are SFE’s top tips to ensure your lasting power of attorney is effective, legally robust and safe:
- Plan early – While you have capacity, it’s vital that you get your affairs in order and choose the best people to manage your affairs, in case of an accident or illness. You can’t appoint an attorney once you lose capacity.
- Choose carefully– Think carefully who you want to appoint as your attorney and have an open conversation with them so they understand your wishes and what their responsibilities will include. Consider appointing more than one person as your attorney so they can share the responsibility.
- Consider appointing a professional– A family member might not always be the best person to act as your attorney. Instead, you can appoint a professional such as a solicitor. They can act as a neutral third party and make unbiased decisions that are in your best interests.
- Think about different circumstances– Consider how you would like your attorney to manage your property and financial affairs in different situations. For example, are you happy for your property to be sold to pay for your care costs?
- Address the difficult questions– Your attorney might have to make difficult decisions about your health and welfare. If you have specific wishes around your care plans, medical treatment, or end of life wishes, make sure you discuss this with them and make your choices clear in your document.
- Seek professional advice – Shop-bought and online LPA kits may be suitable for those with very straightforward financial situations or with considerable legal experience, but for most people, seeking professional legal advice is the best way of ensuring that an LPA is effective, legally robust and safe.
- Keep your plans current– Make sure you keep your LPA updated if your circumstances change. Your choices around the people you want to be responsible for your finances and wellbeing may change, such as following a marriage or divorce, when children reach adulthood, or if parents pass away.
For expert advice on Lasting Powers of Attorney, please contact us.